Yahoo Finance Analysts Just Made A Major Revision To Their Huami Corporation (NYSE:HMI) Revenue Forecasts
Today is shaping up negative for Huami Corporation (NYSE:HMI) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.
After this downgrade, Huami's four analysts are now forecasting revenues of CN¥6.6b in 2020. This would be an okay 7.6% improvement in sales compared to the last 12 months. Prior to the latest estimates, the analysts were forecasting revenues of CN¥7.3b in 2020. It looks like forecasts have become a fair bit less optimistic on Huami, given the measurable cut to revenue estimates.
See our latest analysis for Huami
Notably, the analysts have cut their price target 5.7% to US$16.44, suggesting concerns around Huami's valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Huami at US$17.70 per share, while the most bearish prices it at US$14.10. With such a narrow range of valuations, analysts apparently share similar views on what they think the business is worth.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that Huami's revenue growth is expected to slow, with forecast 7.6% increase next year well below the historical 58% growth over the last year. Compare this to the 213 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 6.8% per year. Factoring in the forecast slowdown in growth, it looks like Huami is forecast to grow at about the same rate as the wider industry.
The Bottom Line
The clear low-light was that analysts slashing their revenue forecasts for Huami this year. They're also forecasting for revenues to grow at about the same rate as companies in the wider market. Furthermore, there was a cut to the price target, suggesting that the latest news has led to more pessimism about the intrinsic value of the business. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of Huami going forwards.
Unsatisfied? We have estimates for Huami from its four analysts out until 2022, and you can see them free on our platform here.
Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.
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